Serco has been fairly bereft of positive news recently, but the outsourcing group is ending the year on brighter note.

Following the company overcharging the taxpayer for electronically tagging criminals (some of whom were in prison or even dead), it agreed to pay back £69m to the government. But there were still doubts about its ability to win similar contracts in the future.

News of an extension to its Thameside prison contract came on Friday, while the company has just announced a six month addition to an Australian contract for detention services.

This has helped send Serco's shares up 11.2p to 483.2p. Meanwhile there was also a positive note on the company from Mike Allen at Panmure Gordon. He said:

We think Serco has made positive steps to re-building its reputation with the UK government. The company has not quite got a clean bill of health, with the approval of the Corporate Renewal Programme still outstanding but likely to be approved in January. We have factored in the exceptional costs related to the government fine, and believe the increased balance sheet leverage is not a major concern at this stage. We have reduced our 2014 and 2015 forecasts due to disposals, increased interest costs and a higher cost base anticipated from the Corporate Renewal Programme. However, we think the company is coming through the worst of its problems in 2013 and we increase our target price to 560p, which is based on 16 times downgraded 2014 estimate earnings per share.

Lower down the market, Premier Foods has slumped 7% to 121.25p after it confirmed it was considering the possibility of a rights issue, as part of a review of its capital structure. There were reports over the weekend - not for the first time - of a possible £300m cash call. Clive Black at Shore Capital said:

Such a development has been a central expectation of Shore Capital for some time; indeed it was the basis behind our positive investment thesis set out on Premier in mid-summer. We encourage management to press on with this as considerable shareholder benefit can still ensure. We also look forward to any progress with the review of the Hovis business, where Ondra Partners have been called in to help.